Health Insurance (Medicare Compliance Shared Debt) Instrument 2019

Administered by Department of Health, Disability and Ageing

Legislation au F2019L00503 In force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Issued by the Authority of the Minister for Health

 

Health Insurance Act 1973

 

Health Insurance (Medicare Compliance Shared Debt) Instrument 2019

 

Authority

Paragraph 129ACA(9)(c) of the Health Insurance Act 1973 (‘the Act’) provides that the Minister may, by legislative instrument, prescribe a percentage of the recoverable amount due to a compliance debt under section 129ACA(1) of the Act that is recoverable from the secondary debtor or estate.

Purpose

The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 (‘Instrument’) prescribes that the default percentage of the recoverable amount to be recovered from the secondary debtor or estate under the Shared Debt Recovery Scheme (‘SDRS’) is 35 per cent. This amount reflects that the practitioner should take primary responsibility for ensuring that Medicare billing under their provider number is correct.

Under the SDRS, subsection 129ACA(2) of the Act provides for the making of a shared debt determination. The effect of making a shared debt determination is that Medicare benefits paid as a result of a false or misleading statement can be claimed in part from a ‘secondary debtor’ in addition to the ‘primary debtor’.

Paragraph 129ACA(3)(b) of the Act provides that the shared debt determination must include the amount, referred to as the shared amount, equal to a percentage of the recoverable amount that is recoverable from the secondary debtor or estate. Subsection 129ACA(4) of the Act provides that the percentage determined by the Chief Executive Medicare (‘CEM’) for the purposes of paragraph 129ACA(3)(b) of the Act must be the percentage prescribed by the Minister under paragraph 129ACA(9)(c) of the Act, unless the CEM reasonably believes in all the circumstances that it is fair and reasonable that a different percentage be determined.

Background

The SDRS in the Act commences on 1 July 2019 and acknowledges that where contractual or other arrangements exist between a health practitioner and an employer or organisation in relation to professional services, both the practitioner (known as the primary debtor) and the other person or entity (known as the secondary debtor) may be held responsible for the repayment of a compliance debt.

A secondary debtor is defined in paragraph 129ACA(2)(b) of the Act and includes an entity that employed or otherwise engaged the primary debtor to render professional services of the kind mentioned in paragraph 129ACA(1)(a), or an entity that had an arrangement or agreement with the primary debtor relating to professional services of that kind. In most circumstances it will be the person who employed or engaged the primary debtor. It is intended that the person who is granted a provider number continues to be held primarily responsible for professional services claimed in their name.

The aim of the SDRS is to apply a fairer and more reasonable approach to dealing with compliance debts due to the Commonwealth after an audit under the Act that were incurred as a result of incorrect organisational billing. The SDRS is designed to encourage practitioners and organisations to work together to minimise incorrect billing and promptly repay compliance debts.

Consultation

The Department of Health undertook public consultation regarding whether 35 per cent was an appropriate default percentage to be recoverable from the secondary debtor under the SDRS. A consultation paper which addressed this issue in addition to other aspects of the SDRS was publicly released on 4 December 2018 and closed on 31 January 2019.

The Department of Health also met with representatives from key stakeholder groups, including State and Territory Health Departments, the Royal Australian College of General Practitioners and the Australian Medical Association to discuss the percentage of the recoverable amount that is recoverable from the secondary debtor or estate.

Stakeholders acknowledged the proposed default percentage and advised that the percentage to be recoverable from the secondary debtor under the SDRS in a particular case should take into consideration documents and submissions from each party.

 

The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 is a legislative instrument for the purposes of the Legislation Act 2003.

The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 commences on 1 July 2019.

The details of the Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 are set out in the Attachment.

 

Authority:  Paragraph 129ACA(9)(c) of the Health Insurance Act 1973


ATTACHMENT

Details of the Health Insurance (Medicare Compliance Shared Debt) Instrument 2019

 

Section 1 – Name of Instrument  

 

This section provides that the name of the Instrument is the Health Insurance (Medicare Compliance Shared Debt) Instrument 2019.

 

Section 2 – Commencement

 

This section provides that this Instrument commences on 1 July 2019.

 

Section 3 – Authority

 

This section provides that the Instrument is made under paragraph 129ACA(9)(c) of the Health Insurance Act 1973.

 

Section 4 – Definition

This section provides that Act means Health Insurance Act 1973.

 

 

Section 5 – Percentage

This section provides that for the purposes of paragraph 129ACA(9)(c) of the Act, the prescribed percentage of the recoverable amount that is recoverable from the secondary debtor or estate is 35 per cent.

 

 


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Health Insurance (Medicare Compliance Shared Debt) Determination 2019 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared by the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

This Legislative Instrument is made pursuant to paragraph 129ACA(9)(c) of the Health Insurance Act 1973 and determines that where a false or misleading statement has been made and the Chief Executive Medicare determines that the compliance debt should be shared between the practitioner (the primary debtor) and another person or entity (the secondary debtor), the default percentage of the recoverable amount that is recoverable from the secondary debtor or estate is 35 per cent.

Human rights implications

This Legislative Instrument does not engage any of the applicable human rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Greg Hunt

Minister for Health

 

 

 

 

 

 

Overview

The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 was enacted to address the issue of compliance debts arising from incorrect Medicare billing under the Health Insurance Act 1973. This legislation was introduced by the Australian Government and aims to establish a fairer approach to recovering compliance debts by involving both the primary debtor, typically the health practitioner, and the secondary debtor, such as an employer or organisation. The Act was designed to ensure that those who are granted a provider number remain primarily responsible for professional services claimed in their name, while also holding secondary debtors accountable in cases where they were involved in the billing process. The instrument sets a default percentage of 35 per cent of the recoverable amount that can be claimed from the secondary debtor, reflecting the principle that practitioners should primarily ensure the accuracy of their billing. This legislative instrument was developed following consultations with key stakeholders and is intended to encourage better practices and prompt repayment of compliance debts. The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 was enacted to provide clarity and structure to the Shared Debt Recovery Scheme (SDRS), which commenced on 1 July 2019. The instrument was created under the authority of paragraph 129ACA(9)(c) of the Health Insurance Act 1973 and sets out that the default percentage of the recoverable amount from the secondary debtor or estate is 35 per cent. This percentage was determined following public consultation and discussions with various stakeholders, including health departments and professional associations. The policy objective is to promote fairness and responsibility in the repayment of compliance debts, thereby minimising incorrect billing and improving the integrity of Medicare payments.

Scope and Application

The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 is a legislative instrument made under paragraph 129ACA(9)(c) of the Health Insurance Act 1973, commencing on 1 July 2019. This Instrument prescribes that the default percentage of the recoverable amount to be recovered from the secondary debtor or estate under the Shared Debt Recovery Scheme is 35 per cent, reflecting the principle that the primary debtor, usually a health practitioner, holds primary responsibility for ensuring correct Medicare billing. The Scheme applies to situations where both the primary debtor and secondary debtor, such as an employer or organisation, may be held responsible for compliance debts resulting from incorrect billing. The prescribed percentage is designed to encourage collaboration between practitioners and organisations to minimise incorrect billing and ensure prompt repayment of compliance debts. The Instrument allows for the Chief Executive Medicare to determine a different percentage if deemed fair and reasonable in specific circumstances.

Key Provisions

The Health Insurance (Medicare Compliance Shared Debt) Instrument 2019 introduces key provisions concerning the recovery of debts from secondary debtors under the Shared Debt Recovery Scheme (SDRS) as outlined in the Health Insurance Act 1973. Specifically, section 5 of the Instrument establishes that the default percentage of the recoverable amount that is recoverable from the secondary debtor or estate is 35 per cent. This percentage was determined following public consultation and stakeholder discussions to reflect a fair allocation of responsibility between primary and secondary debtors (section 129ACA(3)(b) and (9)(c) of the Act). Under the Act, the primary debtor is the practitioner who is directly responsible for ensuring that Medicare billing under their provider number is correct. The secondary debtor is typically the entity that employed or engaged the primary debtor. Both primary and secondary debtors may be held responsible for repayment of a compliance debt if a false or misleading statement has been made. The SDRS is designed to encourage cooperation between practitioners and organisations to minimise incorrect billing and to ensure prompt repayment of compliance debts (section 129ACA(1) and (2) of the Act). The Act imposes obligations on both primary and secondary debtors. Primary debtors must ensure that their Medicare billing is accurate and correct, while secondary debtors must be prepared to contribute to the repayment of compliance debts in accordance with the determined percentage, unless the Chief Executive Medicare (CEM) reasonably determines a different percentage (section 129ACA(4) of the Act). The CEM has the authority to make a shared debt determination, which specifies the shared amount recoverable from the secondary debtor (section 129ACA(3)(b) of the Act). Breaches of the obligations under the Act can lead to various consequences. The Act does not specify explicit criminal or civil penalties for non-compliance, but failure to repay the determined shared debt can lead to further recovery actions by the Commonwealth. These actions may include legal proceedings to enforce the debt recovery or other administrative actions. The severity of these consequences depends on the extent and nature of the non-compliance, and the specific circumstances of each case (section 129ACA(1) and (2) of the Act).

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